Fundamental analysis is one of the analysis that analyzes the factors of affecting the stock market. Using fundamental analysis can understand financial statement of a corporation. Financial index is the main factor of fundamental analysis; we can analyze financial structure, debt paying ability, business capacity, profit ability, cash flow and so on from financial index of a corporation to better understand the reason of stock price fluctuation.
This thesis proposes methods using linear polynomial and polynomial regression. To begin with acquiring total shareholders' equity, gross profit, cash and cash equivalents, total liabilities and inventories to the amount of five financial factors weight coefficient, and then put the financial factor resulted from a polynomial regression forecasting into linear polynomial. As a result, the prediction of stock price is obtained.
In conclusion, there are two results indicated from this paper. First, the methods of the research that use the relationship between financial factor and stock price can obtain the credibility of the financial factor weight. Investors based on fundamental analysis can use this financial factor weights credibility as a reference, in order to understand whether financial factors can be used as a basis for assessment of the stock invested. Second, selecting 39 listed companies when the credibility of financial factor weight is higher than 83%, the accuracy rate that forecasts stock price rise and fall of the 39 listed companies was 58.57% ~ 64.71%. This result provides a valuable reference that fore-casts stock price variation to a certain degree.
